New Delhi, April 2 The Supreme Court on Thursday overturned the bail granted to businessman Satinder Singh Bhasin in connection with a multi-crore rupee alleged "Grand Venice Mall" scam in Greater Noida, and ordered him to surrender to the jail authorities within a week.
A bench comprising Justices Sanjay Karol and N K Singh cancelled Bhasin's bail, citing his failure to fulfill the conditions of the bail, particularly regarding the repayment of claims from flat allottees, and for diverting Rs 50 crore from the funds of Bhasin Infotech and Infrastructure Private Limited (BIIPL) as a bail condition, despite the court's direction that the funds should come from his personal account.
"The petitioner has not complied with the conditions of bail imposed upon him vide order dated November 6, 2019. Consequently, the bail granted to the petitioner is cancelled. The petitioner is required to surrender within one week from the date of this judgment," the bench said.
The order was issued in response to petitions filed by allottees of the "Grand Venice" project, seeking the cancellation of Bhasin's bail due to violations of certain conditions imposed upon him.
The top court directed that Bhasin may apply for regular bail after a period of twelve months, subject to fully complying with the orders passed in the insolvency proceedings.
Insolvency proceedings were initiated against Bhasin's companies under the Insolvency and Bankruptcy Code, 2016.
"It is directed that the petitioner's passport shall not be released by the trial court without the leave of this court," the bench said.
The apex court also forfeited the Rs 50 crore plus accrued interest deposited by Bhasin as part of the bail condition.
"We direct that out of the aforesaid amount, Rs 5 crore plus proportionate accrued interest be transmitted to the National Legal Services Authority for its utilization in achieving its objectives," the bench said.
"The remaining amount, along with proportionate accrued interest, be transmitted to the IRP for the purposes of the IBC proceedings. The registrar (judicial) of this court to ensure immediate compliance by the concerned trial court in disbursal of the above amounts," the bench said.
In its 103-page judgment, the apex court noted that Bhasin was directed to pay Rs 50 crore in his individual capacity for bail, but he had diverted funds from his company.
"Upon a consideration of the submissions and the breakup as filed by the petitioner himself, it cannot be disputed that the amount of Rs 50 crore originated from the funds of Bhasin Infotech and Infrastructure Private Limited and other related entities," the bench said.
"We are inclined to agree with the submissions advanced by the respondents. The condition requiring a deposit as a prerequisite for grant of bail was imposed upon the petitioner in his individual capacity. This condition required bona fide, if not strict, compliance," the bench said.
It stated that an alarming aspect is that no board resolution has been passed by BIIPL before disbursal of the amount to secure his bail.
"In the present case, it cannot be said that the loan to secure bail for the petitioner was connected to the company's principal business activities by any stretch of imagination," the bench said.
"Therefore, the deposit of the amount through the purported loan taken by the petitioner from BIIPL in the absence of any documentary approval or compliance with statutory requirements of Section 185 of the Companies Act, 2013 cannot be sustained," the bench said, adding that not a single rupee has been invested from the personal funds of the petitioner.
Regarding the allegation by allottees that the project is still not complete, the top court said that the conduct of the petitioner is represented by the fact that at this stage, despite repeated attempts, there is a complete lack of essential information regarding the project.
"There is no clarity on the final number of allottees, the unit number that they have been allotted, the consideration paid and the dues remaining. In this situation, execution of tripartite lease deeds also seems improbable," the bench said.
It stated that the project is not in a condition where possession can be handed over to the allottees, and that Bhasin did not make genuine and meaningful efforts to settle the claims of the allottees.
"Despite the passage of time, a large number of allottees have neither received possession nor a refund. Even in cases where settlement agreements have been executed, the terms thereof have not been fulfilled. These agreements have remained largely on paper and not resulted in actual relief to the allottees," the bench said.
The top court had, in November 2019, granted Bhasin, the director of Bhasin Infotech and Infrastructure Private Limited, bail in these cases, subject to various conditions.
Around 46 FIRs were registered against several people in connection with the alleged scam, in which investors claimed that they were duped by the accused when handing over the plot of land.
The FIRs, registered in New Delhi and Uttar Pradesh, were filed by the allottees of units in the project against the petitioner, alleging non-delivery of their units, diversion of their funds, and impropriety in land allotment in collusion with state officials.